After the last several years, you don’t need a finance course to know that stocks are risky.
If you’ve looked at the fluctuating value of your own stock portfolio, you already have a visceral understanding of market volatility. These violent ups and downs provide powerful reasons for fleeing stocks — and for buying protection in the form of government bonds, even if their yield is minuscule.
Investors may have absorbed the arguments for avoiding risk so completely that they have lost their taste for it. That’s why a new position paper by Seth J. Masters, chief investment officer of Bernstein Global Wealth Management, is startling. Its title is “The Case for the 20,000 Dow.”
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